China’s Pork Imports Down Due to Domestic Market and Trade Trouble

China's pork imports through November 2018 were down from a year earlier, but according to Dim Sums: Rural China Economics and Policy, the African swine fever epidemic has not affected its pork trade yet.

“But the industry is reportedly shedding production capacity due to disruptions of internal hog marketing and gloomy prospects for controlling the virus,” the Dim Sums report said.

China's pork imports were likely impacted both by domestic market conditions (a plunge in domestic prices earlier in the year suppressed demand for imports) as well as the trade war, the report noted.

China’s decreased pork imports
China’s decreased pork imports reflect mainly lower offal imports from the U.S., reported Jim Wiesemeyer of ProFarmer. Imports of offal (organs, feet, snouts, etc), were down 21%. The decline in offal shipments from the U.S. accounts for most of the decline in offal imports.

Imports of muscle cuts were down less than 1%, year-on-year. Imports of muscle cuts from other sources did not offset the 68,495 metric-ton decline in imports of U.S. muscle cuts.

The share of China's pork imported from the U.S. shrank to 3.6% in November 2018 as China imported from a number of other pork suppliers in Europe and the Americas. From April to November 2018 (when China's tariffs on U.S. pork were in place) China's largest pork suppliers were Spain (16% share), Germany (15%), and Canada (13%), Wiesemeyer said. The share of pork imported from the U.S. during those months (10%) was comparable to shares from Denmark (10%), the Netherlands (9%), and Brazil (8%). Other significant suppliers included France (6%), Ireland and Chile (3% each).

China’s domestic pork supply
China's overall domestic pork supplies seem to be adequate at present, but supplies are expected to be tighter in 2019, Dim Sums noted.
A Soozhu.com commentary this week observed that hog prices are as low as 8 yuan/kg in surplus provinces and 20 yuan/kg in net-consuming provinces. The commentary observed that China is now in a protracted war against ASF and the war of low prices is just beginning.

In addition, big companies and small farms both expanded production aggressively during the price-peak in 2016, “but this year tumbling prices, disruption of cash flow and biosecurity requirements are pushing small-scale producers out of production, while remaining producers are cautious about adding capacity,” Soozhu.com noted.

Restrictions on inter-provincial shipments have hurt big companies specialized in breeding and propagation, but the Ministry of Agriculture recently loosened restrictions on shipments of piglets.